The House Oversight and Government Reform Committee today approved legislation that would allow employees under the Federal Employees Retirement System to count their unused sick leave toward calculating their retirement annuities.

The bill also would automatically enroll new federal civilian employees — but not new military service members — in the Thrift Savings Plan, the government's retirement investment program.

The provisions are among several affecting federal employees in HR 1256, the Family Smoking Prevention and Tobacco Control Act. The bill will now head for a vote before the full House.

The sick leave provision has long been sought by federal employee advocates who say that the current system, where FERS employees receive no credit for unused sick leave at retirement, encourages them to use up as much sick leave as possible in their final years. This so-called "FERS flu" costs the government an estimated $68 million in lost productivity each year, according to the Office of Personnel Management. Civil Service Retirement System employees already get credit for unused sick leave in their annuities.

The TSP provision would automatically enroll new civilian employees in the government securities-backed G Fund, which does not decline in value and is widely viewed as the safest TSP fund. The bill recommends an automatic investment of 3 percent of new employees' paychecks to TSP, though it allows the board overseeing TSP to set the default percentage anywhere between 2 percent and 5 percent. Although new employees would be automatically enrolled, participation would not be mandatory — employees would be able to choose not to participate in TSP.

The bill originally would have automatically enrolled new military service members in TSP. But an amendment Rep. Darrell Issa, R-Calif., attached to the bill would leave it up to the Pentagon to decide if the military should be automatically enrolled. Issa said it might not be fair to include military service members since the Defense Department does not match their TSP contributions. Civilians under FERS receive government contributions up to 5 percent in their accounts.

Another approved Issa amendment would require the Pentagon to study how much matching service members' TSP contributions would cost and whether it would help recruitment and retention. Issa said the time has come to give service members matching TSP contributions, though it could cost billions of dollars.

"Our men and women in uniform are treated disproportionately and poorly when it comes to TSP," Issa said.

Committee Chairman Edolphus Towns, D-N.Y., agreed with Issa.

"We should provide top-notch retirement benefits to our uniformed military personnel," Towns said.

Among other provisions:

• The bill would create a Roth option for TSP investors. Under a Roth option, participants would pay taxes when they make contributions to their TSP retirement investment accounts. When they retire and withdraw those funds, they would not be taxed. That differs from the current tax-deferred TSP plan, where contributions are taxed at the time of withdrawal.

The Federal Retirement Thrift Investment Board, which oversees the TSP program, said military service members are most likely to benefit from a Roth option, since their current tax rates are likely to be lower than future tax rates. Civilian employees will usually pay lower taxes in the future, which the board says makes a Roth option less beneficial for them.

• Rep. Stephen Lynch, D-Mass., attached an amendment that would ensure CSRS employees who work part time at the end of their careers are paid their full annuities. Due to a faulty 1986 law, CSRS employees who go part time before retirement find their pre-1986 service is incorrectly calculated as part-time service. This reduces the annual annuities of some CSRS retirees by hundreds, or even thousands, of dollars each year.

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